Retirement & Financial Planning Report

For retirement income, consider a laddered bond portfolio. Such a ladder would contain individual bonds that mature at specific future dates, generating the amount of income that will be needed then. The bonds in your ladder should increase in size so that you will receive more money as they mature, allowing your spending to keep up with inflation.

Unlike bond funds, individual bonds have no expenses, which helps boost your returns. However, individual bonds typically go six months between interest payments. Therefore, you might want to hold bonds from different issuers so that you receive interest payments each month.

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* You can use the bond interest for spending, if necessary.

* Alternatively, you can rely upon bond redemptions, at maturity, for spending money. If so, the bond interest can go into stock funds, for long-term growth.

As your bonds mature, your ladder will be missing a rung. If your ladder then has no bonds longer than nine years, for example, you might sell some stocks to provide enough cash to buy a 10-year bond, restoring your ladder.